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Monday, September 26, 2016

Deutsche Bank shares plummet to record low as Merkel rules out bailout

Shares in Germany’s largest bank have hit rock bottom on Monday as Chancellor Angela Merkel reportedly refused to provide Deutsche Bank state aid in its legal battle with the United States Department of Justice (DoJ).

Deutsche shares fell as much as six percent to €10.67 in early Monday trading, the worst performance since 1992.
The bank has lost over 52 percent of its value since January and over 56 percent in the last twelve months. Earnings per share fell as much as €6.

The collapse has been prompted by a report in the German magazine Focus that said Chancellor Angela Merkel has ruled out any state assistance for the bank next year.

Merkel also declined to provide help to Deutsche Bank in its legal battle with the DoJ. The Frankfurt-based lender may be fined up to $14 billion over its mortgage-backed securities business before the 2008 global crisis, the magazine reported. The article said Merkel made her views clear in talks with Deutsche CEO John Cryan.

Deutsche Bank has denied that Cryan asked for state support from Berlin, CNBC reported on Monday.

The Bundestag expects a “fair outcome” to the US probe, the Finance Ministry said on September 16. The bank has refused to pay the US government and is seeking a reduced penalty. Deutsche has said a settlement between $2 billion and $3 billion would be more reasonable, as it had already paid $1.9 billion in 2013 to settle similar accusations, the Wall Street Journal reported in September.

Credit to RT

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